THOUGHTS ABOUT THE CHARITABLE REMAINDER TRUST AND ITS TAX BENEFITS

THOUGHTS ABOUT THE CHARITABLE REMAINDER TRUST AND ITS TAX BENEFITS

Posted By
Davidov Law Group

The charitable remainder trust is a really interesting tool in your estate
planning attorney’s tool belt. It’s so cool that we thought
you might find it interesting and want to incorporate it into your estate
plan. Here are our thoughts on the charitable remainder trust itself as
well as its tax benefits.

You set up a trust and donate low basis highly appreciated assets into
the trust (yes, there must be some highly appreciated assets out there!)

Because a charity doesn’t pay income taxes, when the assets are sold,
you do NOT pay any capital gains taxes
(tax benefit #1.)

You name an IRS recognized charity as the beneficiary of the remainder
interest so you receive a federal income tax deduction based upon the
remainder interest
(tax benefit #2.)

The assets you donate to the trust are out of your estate for federal estate
tax purposes
(tax benefit #3.)

Because the assets are out of your estate, there will be no probate fees
associated with these assets.

You receive an income stream for your life (or the joint lives of you and
your spouse) or for a period of years (i.e. 20 years.)

The income stream you receive is tiered so it is not straight income and
has an overall lower income tax rate
(tax benefit #4.)

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Nothing on this site should be taken as legal advice for any individual
case or situation. This information is not intended to create, and receipt
or viewing does not constitute, an attorney-client relationship.